PAGCOR Might Soon Stop Operating Casinos In The Philippines

The Philippines’ Department of Finance is contemplating removing casino operations from the country’s gaming regulator, the Philippine Amusement and Gaming Corp (PAGCOR) based on local media reports.

In a statement, Carlos Dominguez Finance Secretary, said,

We believe that government should only be in regulatory functions and not in commercial functions and therefore [should] dispose of – by sale or closing down – the commercial functions

Dominguez has been recently appointed by the Philippines’ President Rodrigo Duterte who took office earlier this year.

According data from the second quarter of this year, PAGCOR controlled around one-third of all table games operational in the market and around 60 percent of all electronic gaming machines (EGMs). PAGCOR operates 45 casinos spread across key cities under the brand Casino Filipino. It runs around 10,603 EGMs and 608 gaming tables at these venues as per the latest report. PAGCOR also had oversight of 10 private-sector casinos, which controlled 7,205 EGMs and 1,280 gaming tables during the same period.

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This is not the first time that the government in the Philippines has contemplated removing casinos operations from PAGCOR’s scope of responsibilities. In December 2015, during the final months of previous President Benigno Aquino’s administration, a government commission had recommended that PAGCOR’s casino operations be privatized so that the body could focus on regulating the gambling industry.

Gaming industry experts have also previously highlighted that a model where the regulator also operated casinos could result in a conflict of interest with respect to regulatory policy areas. PAGCOR Chair Andrea Domingo has said that her staff is already working on the pricing and disposal process for PAGCOR casinos. She added that the privatization was complicated as the leasing contracts for each site were different.

In late 2010, the owner of San Miguel Corp, one of Philippine’s largest companies had expressed interest in buying the casinos owned by PAGCOR for $10 billion but the idea did not materialize. There are also reports that President Duterte is pushing for a merger between PAGCOR and the national lotto operator Philippine Charity Sweepstakes Office (PCSO).

Domingo has expressed her opposition to the idea saying it would be difficult to manage mass games of PCSO along with the high-end games. She however added that if it was part of the new government policy she would follow it. President Duterte recently decided to cut down on the e-games and e-bingo industry in the country after PAGCOR was instructed to not renew the license of Philweb Corp, who was the biggest operator of the these e-games. The President felt that the company was making significant profits by taking advantage of Filipinos who were struggling economically and hoping for a better future.

Adrian Sterne

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